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Thursday June 26 2014

Govt invites Russian, South Korean firms for refinery tender

An oil rig being used to drill oil at one of the sites in the Albertine region. Government estimates oil reserves at 3.5 billion barrels. FILE PHOTO

In Summary

Refinery expected to be run on private - public partnership

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By Abdulaziizi K Tumusiime

KAMPALA

The government has invited SK Group from South Korea and RT – Global Resources from Russia to the negotiation stage of the country’s oil refinery tender process.

The two consortia were preferred over two others with whom they recently submitted proposals to government for the role of lead investor for the 60,000 barrels per day (bpd) oil refinery and related downstream infrastructure.A team of government representatives, supported by Taylor DeJongh, the US-based government transaction adviser (hired in 2012), undertook the evaluation of the bidders this month.

Marubeni Corporation (from Japan) was not evaluated due to lack of a bid bond as per the requirements of the Request for Proposals (RFP), while China Pipeline Petroleum Bureau proposal did not adequately satisfy all the requirements of the RFP, according to a statement issued by the Petroleum Exploration and Production Department.

“Government will commence negotiations with the two preferred bidders and thereafter issue a request for the Best and Final Offers document. The two consortia will be expected to submit their respective Best and Final Offers by the end of August 2014,” said Mr Fred Kabagambe-Kaliisa, Permanent Secretary, Ministry of Energy and Mineral Development.

He added: “Government will then negotiate the Principal Project Agreements with the highest scoring Preferred Bidder. Once executed, it will take forward the development of the project.”

SK Group from South Korea owns the second largest refinery in the world of 1.12 million bpd while RT Global resources and its consortium members have developed key refining projects in Russia.

Feasibility study for the development of a green field refinery in Uganda confirmed that developing a refinery in Uganda was profitable. The refinery is to be developed on a Private – Public Partnership basis with the government holding up to 40 per cent equity.